New Pdvsa Bond Sold Directly To State Banks

May 13, 2012

After weeks (months?) of rumors, late Friday night, PDVSA finally announced a new bond. This time around it is a 2035 issue payable in three parts in 2033, 2034 and 2035. The bond will have a coupon of 9.75%.

The bond will not be sold to individuals or companies, it will all be sold to State banks, largely to the Central Bank in order to supply the bank’s foreign exchange system SITME. While many people are dissapointed that they will not be included, it makes sense, the operational hassle of thousands of people applying to get only $1,000 at the preferential rate of Bs. 4.3 per dollars simply does not make sense.

Reportedly, there were disagreements about whether to issue or not, but like so many “secrets” in this opaque Government, we might never know if they were true or not. The truth is that since January there have been rumors of a bond, then three weeks ago, the Minister if Energy and Oil said that for now, PDVSA was not going to issue, a sure sign something was up. Last week, rumors were rampant, now here it is, the debt continues to grow

45 Responses to “New Pdvsa Bond Sold Directly To State Banks”

  1. captainccs Says:

    The “parallel” market will rise.

  2. Rafael V. Lozano Moreno Says:

    Miguel, there is information in the newspaper El Nacional today, which will be placed Tarry bonds to international investors, PDVSA 2035 Bonus has not been nor will be registered under the Securities Act of the United States of America (Securities Act of 1933 ) and is offered only outside the United States under Regulation S and Rule 144A under the above Act, whereby PDVSA Bonds 2035 may be purchased on the secondary market for investors in the United States that qualify as “buyers qualified institutional buyers “under Rule 144A.

    • moctavio Says:

      All bonds have been issued like that for Pdvsa since they stopped filing at the Sec and retired the “old” Pdvsa debt

    • John Maynard Says:

      9.75% per cent for a US dollar 20 year bond seems high. What’s PDVSA’s rating?

  3. island canuck Says:

    Miguel ABC News Español is reporting that this bond issue is just an excuse for the narco generals & others to wash their money in view of a possible collapse of the Chavez presidency.

    http://www.abc.es/20120512/internacional/abci-chavez-narco-blanquear-dinero-201205121320.html

    Actually anything that happens in the coming months (weeks?) will be as a direct result of this fear. Interesting times ahead.

    • moctavio Says:

      I am not sure how that would work, given that it is sold directly to banks. Pdvsa issues the bond, the Central Bank gives it Bs. In exchange for the bonds. The bonds are sold in Sitme in sizes no bigger than 50,000 dollars. Not sure where anyone could launder money in such a tight circle. If it had been sold to the public, I could see it.

    • Great White Says:

      that newspaper has been caught peddling roger noriega’s fantasy tales…sounds like more of the same…could be the chauffeur

      • syd Says:

        sigh. here we go again with the roger-noriega-no-backup-smear campaign from Great White aka GWEH (great white elephant hunter). Qué ladilla.


  4. ‘the debt continues to Frow.’

    grow…?
    froth …

    cheers


  5. re: pdvsa bonds
    Here’s a cursi argument –
    thought I’ll share it-

    We should reject the idea that it is JUST to repay what it owed.
    A man lends you money, and then goes insane?
    Surely it cannot be JUST to repay money back into the hands of that madman?

    so there still is hope for pdvsa,
    if institutions are crazy enough to lend pdvsa money,
    they can forget repayments.
    cheers
    [I know... the reasoning is flawed,
    but hey, today's sunday, it is mother's day,
    and life goes on]

  6. syd Says:

    “PDVSA President Rafael Ramirez said last month that PDVSA’s debt levels are “comfortable” and that there’s room to borrow more in coming years…”

    http://www.bloomberg.com/news/2012-05-12/pdvsa-to-sell-3-billion-of-23-year-bonds-ending-6-month-drought.html

  7. CarlosElio Says:

    So much obsession with the dollar. Wasn’t the SUCRE supposed to unseat the dollar as the preferred exchange currency. Is the SUCRE alive today? With Unasur, ALBA, Caricom and CELAC there is a good scenario for SUCRE.What is lacking? Political will? or the fantasy is only good for a fleeting front page?

    • Great White Says:

      ask Mark Weisbrot @ CEPR, SUCRE was his idea. he’s still working for Bernardo showing how important he is (many dropped when paymaster Alvarez returned):

      http://www.huffingtonpost.com/mark-weisbrot/venezuela-is-not-greece_b_567763.html

      • Isa Says:

        That article is two years old.

      • syd Says:

        what a waste of time. GW (aka GWEH) once again provides information that is completely OT to the questions posed.

        CarlosElio: while I have no insider information, as GW pretends to have, it seems as though the ALBA has dwindled in Venezuela’s political affectations. And since the sucre (= a unit to establish the value of work = whatever) was part of that ALBA initiative, I would assume that for Venezuela, the sucre is an idea that is no longer viable. After all, the drug trade is still very US-dollar centric, don’t you think?

        The last information that appears on the sucre is from a simple google that brings up this rot: http://venezuelanalysis.com/analysis/5324

        • Great White Says:

          The Sucre is/was Weisbrots idea thus my response to the question is appropriate. Much better than anything you can dredge up. The op has much better chance at contacting Mark and getting a response than from anyone else. Sorry about the old article…I can see you like me

        • Great White Says:

          Syd, if you want to get your kicks, contact mark and ask him what his role in the sucre is. Mark will love to brag to you but don’t identify yourself as oppo. If I’m wrong that he’s not creator of Sucre, you can then skewer me but until then, GFU

          • Great White Says:

            Syd, GFY

            • GWEHwannabe Says:

              HCF’s pelvic bone is shattered. Maduro is being groomed, the military is anxiuos to get their new toys. Interesting times ahead of us. HCF will die in 3 weeks, 2 days, 1 hour, 22 minutes and 44 seconds.

            • Ira Says:

              Are you sure it’s not GFU?

              Nothing as pitiful as someone throwing a terrible insult like that at someone, and not even knowing how to correctly spell the acronym for it.

              And I’ll wait while you look up what “acronym” means.

          • syd Says:

            You must be living with Mark to know his inner thoughts. Caracho!

    • CharlesC Says:

      Carlos- it is all a dumb idea. It was in the beginning and is the same now.
      “With Unasur, ALBA, Caricom and CELAC there is a good scenario for SUCRE”
      From day one-I thought this was a dumb joke-and noone would take it seriously. Why do you mention this stuff?
      Sucre -still exists with Chavez, Raul, Evo, Daniel Ortega, et al=kisses.
      The last word-is was that the Sucre would exist between ALBA countries as credits and not paper based- and Chavez said Cuba has been making
      payments-via sucre, yeah….

      • Great White Says:

        It seems a few are upset. Gweh stands for great white elephant hunter. Now I ask again, Syd praised CG for exposing Noriega on the abc spain story. Why the double standard Syd.

        • syd Says:

          “Syd praised CG for exposing Noriega on the abc spain story.”

          1. Don’t be fantasist; it reveals a troubled mind. I didn’t read the abc spain story on CG, nor did I comment on it.
          2. As GWEHwannabe2 said: provide backup.

  8. moctavio Says:

    B- if my memory serves me right (could be B). Venezuela’s bond have a huge risk premium because of the constant issuance and low transparency of fiscal numbers.


  9. Here is some relevant blah- blah …
    Leave me be.
    I’m just the messsss.senger.
    cheers

    Copyright 2012, by S.J. Rundt & Associates, Inc

    March 2012 Credit Risk Rating: 7 Bias: Stable

    INTERNAL FINANCIAL:
    While the government can sustain its massive social spending, even in stepped-up form in
    the run-up to the presidential elections this year, so long as world oil prices are at USD 100
    a barrel or higher, it cannot avoid the inflationary impact of this spending. Despite extensive price controls in effect since 2003, monetary erosion according to official (and probably understated) is running at a yearly clip of 27%, despite the economy’s relatively slow
    recovery from a year and a half of recession. Showing some flexibility, Chavez has been
    rolling back a few of his nationalizations, but this should not be seen as a real course
    change. If he wins re-election, the push for “Bolivarian Socialism” will persist, even though
    the regime has been finding out the hard way that fully nationalized companies have been
    floundering under inexperienced management.
    EXTERNAL FINANCIAL:
    The state oil company PdVSA, which the regime has been using as a cash cow for its social
    projects, is pretty much tapped out. In all, PdVSA has about USD 25.5 billion of dollar
    bonds outstanding. As for the government, it predicts that its debt service costs will jump
    141% this year after it issued USD 7.2 billion of bonds this year with interest rates of
    11.95% and 11.75%. One cushion the government has is that it often sets a conservative oil
    export price in the budget. The 2012 household plan was calculated using an average quotation of USD 50 a barrel, while the actual price in 2011 averaged a record USD 99.58 pb.
    But, then, the budget is considered a floor on spending, with outlays rising during the year
    through “additional credits” that are awarded discretionally to various Ministries.

  10. Great White Says:

    The fact remains that HCF will be dead soon. Why anyone should get upset about predictions and estimates beats me. We should be making bets and taking odds on his demise. I predicted in this blog one year ago that he would be dead around April. So did Miguel. Much better than the five year outlook given by some here. I’m going to celebrate his death so fire away.

  11. Great White Says:

    And btw, I never saw the election happening and power being handed over….I just may be right about that too. Syd sorry to burst your bubble.

  12. Great White Says:

    Syd, the great white north is a long way from Caracas and Havana. Do yourself a favor and read “castros’s secrets”

  13. Great White Says:

    Syd, como dicen Bob and Doug: take off!

  14. G.W.E.H.wannabe2 Says:

    Will someone please sedate the patient?

  15. Dr. Faustus Says:

    On Hugo’s disappearing act…..

    The fact that Hugo is currently in hiding at Miraflores reminds me of an old Saturday Night Live skit. Back in the day before cell phones anyone calling the airport to locate someone on an important matter would request that he/she be paged by the airport public announcer. Anyway, a writer at Saturday Night Live thought-up the idea of people standing around baggage claim and hearing this announcement coming over the loudspeaker: “Attention please, attention, will Dr. Joseph Mengele please pick-up the white courtesey phone, Dr. Joseph Mengele.” Wait a minute, wait a minute, isn’t that the guy……?

    “Will Hugo Chavez Fria please pick-up the white courtesey phone…..”

    For those who’ve forgotten,…Mengele…think Auschwitz.

  16. island canuck Says:

    Gawd do these immature children bore me. Egos fighting one another. All we need is another Kepler vs FP schoolyard fight.

    Let’s all get back to the main issue facing us all – the future – and leave these petty squabbles to another era.

  17. Ira Says:

    Has Hugo shown his face anywhere since Friday?

    I say dead by June 15th, June 30th the latest.

    And if he has to return to Cuba for treatment, he never returns.

  18. VJ Says:

    LOL……. No Kidding !!!
    There is an online poll in the official web page of Partido Comunista de Venezuela that today, at this time 20:47 VLT shows: HCR => 1495 votes HCF=> 133.

    http://www.tribuna-popular.org/index.php?option=com_apoll&view=apoll&id=1:si-las-elecciones-presidenciales-se-efectuaran-manana-por-quien-votarias

    • Rojorojito Says:

      How stupid to laugh at a dumb poll. Lets wait until oct 8 and see who has the last laugh. Hahaha


  19. [...] ain’t gonna happen for a while. Meanwhile, New Pdvsa Bond Sold Directly To State Banks The bond will not be sold to individuals or companies, it will all be sold to State banks, largely [...]


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